Dave Lutz, head of ETFs at JonesTrading, has an overview of today’s markets.
Good Morning! US Futures are showing no recovery from Friday’s smash, as Outgoing Fed Head Yellen Says Prices ‘High’ for Stocks – The Spoos are off 70bp, nearing that 5% drawdown needed, as traders say this is “A healthy and much needed pullback”. It’s a bit ugly overseas tho, with the Euro Stoxx 600 back in the red YTD – DAX nearing off 2% for 2018 as Germany gets hit for 1% today. Financial, technology and resource stocks leading the selling in heavy volume – Most exchanges trading 30-40% above trends. FTSE a bit worse off, down 1.2% as Consumer and Healthcare hit for nearly 2%. Asia was pretty ugly – Nikkei got smoked for 2.5% as it breaks downside 23,000 – Hang Seng lost 1%, but Shanghai climbed 75bp as the Chinese Banks were on Fire, with the biggies gaining 3-4%+. KOSPI lost 1.3% as eyes remains on Bitcoin, Aussie hit for 1.5%, the worst session in 7 months – while Sensex loses another 90bp as it reels from the plan to tax stock gains.
All talking head focus remains on yields, but you can’t blame them for today’s equity weakness. Germany’s 10YY is coming in 3bp, and the US 10YY just dipped red. Euro under $US1.25 as retail sales post light into Draghi’s annual report to the European Parliament at 11amET – Sterling breaking downside $US1.41 as PMIs post weak, but the $ remains off Friday’s highs as the Yen catches a bid. Gold is up very small, but that Bitcoin is getting smashed for another 11% as China and Indian headers weigh. Ore rebounds 2.5% overnight, helping Copper pop 35bp. Energy Complex is all red tho, with Natty off small, but WTI getting hit for 1%+ early.